Provisions (Tables)

12 Months Ended

Jun. 30, 2018

Provision for dividends and other liabilities [Member]


	2018			2017
	US$M			US$M
Movement in provision for dividends and other liabilities
At the beginning of the financial year		984			930
Dividends determined		5,221			2,871
Charge/(credit) for the year:
Underlying		337			316
Discounting		4			5
Exchange variations		3			53
Released during the year		(78	)		(122	)
Utilisation		(150	)		(223	)
Dividends paid		(5,325	)		(2,921	)
Transferred to liabilities held for sale		(39	)		–
Transfers and other movements		(13	)		75

At the end of the financial year ⁽¹⁾		944			984

Comprising:
Current		290			332
Non-current		654			652

⁽¹⁾	Includes unpaid dividend determined to non-controlling interest of US$nil (2017: US$105 million).

Employee benefits, restructuring and post-retirement employee benefits provisions [Member]

Summary of Provisions


	2018		2017
	US$M		US$M
Employee benefits ⁽¹⁾		1,232		1,177
Restructuring ⁽²⁾		8		10
Post-retirement employee benefits		449		438

Total provisions		1,689		1,625

Comprising:
Current		1,148		1,062
Non-current		541		563

⁽¹⁾	The expenditure associated with total employee benefits will occur in a pattern consistent with when employees choose to exercise their entitlement to benefits.

⁽²⁾	Total restructuring provisions include provisions for terminations and office closures.

Summary of Reconciliation of Employee Benefits, Restructuring and Post-retirement Employee Benefits

2018

Employee
benefits

Restructuring

Post-
retirement
employee
benefits ⁽³⁾

Total

US$M

At the beginning of the financial year

1,177

438

1,625

Charge/(credit) for the year:

Underlying

1,073

1,101

Discounting

–

Net interest expense

–

(15

)

(15

)

Exchange variations

(29

)

–

(24

)

Released during the year

(31

)

–

(32

)

Remeasurement gains taken to retained earnings

–

)

Utilisation

(958

)

(34

)

(999

)

At the end of the financial year

1,232

449

1,689

⁽³⁾	Refer to note 24 ‘Pension and other post-retirement obligations’.

Closure and rehabilitation provisions [Member]

Summary of Provisions


	2018			2017
	US$M			US$M
At the beginning of the financial year		6,738			6,502
Capitalised amounts for operating sites:
Change in estimate		35			71
Exchange translation		(122	)		99
Adjustments charged/(credited) to the income statement:
Increases to existing and new provisions		132			127
Exchange translation		(11	)		9
Released during the year		(165	)		(120	)
Other adjustments to the provision:
Amortisation of discounting impacting net finance costs		352			330
Expenditure on closure and rehabilitation activities		(178	)		(132	)
Exchange variations impacting foreign currency translation reserve		–			(1	)
Divestment and demerger of subsidiaries and operations		–			(146	)
Transferred to liabilities held for sale		(450	)		–
Other movements		(1	)		(1	)

At the end of the financial year		6,330			6,738

Comprising:
Current		274			255
Non-current		6,056			6,483

Operating sites		5,120			5,462
Closed sites		1,210			1,276

Samarco dam failure [member]

Summary of Financial Impacts of Samarco Dam Failure

The table below does not include BHP Billiton Brasil’s share of the results of Samarco prior to the Samarco dam failure, which is disclosed in note 28 ‘Investments accounted for using the equity method’, along with the summary financial information related to Samarco as at 30 June 2018.


Financial impacts of Samarco dam failure	2018			2017			2016
	US$M			US$M			US$M
Income statement
Expenses excluding net finance costs:
Costs incurred directly by BHP Billiton Brasil and other BHP entities in relation to the Samarco dam failure ⁽¹⁾⁽²⁾		(57	)		(82	)		(70	)
Loss from equity accounted investments, related impairments and expenses:
Share of loss relating to the Samarco dam failure ⁽²⁾⁽³⁾		(80	)		(134	)		(655	)
Impairment of the carrying value of the investment in Samarco ⁽³⁾		–			–			(525	)
Samarco dam failure provision ⁽²⁾⁽³⁾		(429	)		(38	)		(1,200	)

Loss from operations		(566	)		(254	)		(2,450	)
Net finance costs		(84	)		(127	)		–

Loss before taxation		(650	)		(381	)		(2,450	)
Income tax benefit		–			–			253

Loss after taxation		(650	)		(381	)		(2,197	)

Balance sheet movement
Trade and other payables		4			(3	)		(11	)
Investments accounted for using the equity method		–			–			(1,180	)
Deferred tax assets		–			–			(158	)
Provisions		(228	)		143			(1,200	)
Deferred tax liabilities		–			–			411

Net (liabilities)/assets		(224	)		140			(2,138	)


			2018				2017				2016
			US$M				US$M				US$M
Cash flow statement
Loss before taxation				(650	)			(381	)			(2,450	)
Adjustments for:
Share of loss relating to the Samarco dam failure ⁽²⁾⁽³⁾	80					134				655
Impairment of the carrying value of the investment in Samarco⁽³⁾	–					–				525
Samarco dam failure provision ⁽²⁾⁽³⁾	429					38				1,200
Net finance costs ⁽²⁾	84					127				–
Changes in assets and liabilities:
Trade and other payables	(4	)				3				11

Net operating cash flows				(61	)			(79	)			(59	)

Net investment and funding of equity accounted investments ⁽⁴⁾				(365	)			(442	)			–

Net investing cash flows				(365	)			(442	)			–

Net decrease in cash and cash equivalents				(426	)			(521	)			(59	)

⁽¹⁾	Includes legal and advisor costs incurred.

⁽²⁾

Financial impacts of US$(650) million from the Samarco dam failure relates to US$(80) million share of loss from US$(80) million funding provided during the period, US$(57) million direct costs incurred by BHP Billiton Brasil Ltda and other BHP entities, US$(84) million amortisation of discounting impacting net finance costs, US$(560) million change in estimate and US$131 million exchange translation.

⁽³⁾

At 30 June 2016, BHP Billiton Brasil Ltda adjusted its investment in Samarco to US$ nil (resulting from US$(655) million share of loss from Samarco and US$(525) million impairment) and recognised a provision of US$(1,200) million for obligations under the Framework Agreement. US$(572) million of the US$(1,200) million provision represents an additional share of loss from Samarco with the remaining US$(628) million recognised as provision expense.

⁽⁴⁾

Includes US$(80) million funding provided during the period and US$(285) million utilisation of the Samarco dam failure provision, of which US$(281) million allowed for the continuation of reparatory and compensatory programs in relation to the Framework Agreement and a further US$(4) million for dam stabilisation and expert costs.

Summary of Provisions

Provision for Samarco dam failure

2018

2017

US$M

US$M

At the beginning of the financial year

1,057

1,200

Movement in provision

228

(143

)

Comprising:

Utilised

(285

)

(308)

Adjustments charged to the income statement:

Change in estimate

560

Amortisation of discounting impacting net finance costs

127

Exchange translation

(131

)

(22)

At the end of the financial year

1,285

1,057

Comprising:

Current

313

310

Non-current

972

747

At the end of the financial year

1,285

1,057